The second largest stable cryptocurrency in the world is undergoing a change

Circle has announced that it is once again changing the combination of its USDC cryptocurrency reserves stablecoin with cash and US Treasuries, after falsely claiming that the coin is backed 1: 1 by the actual dollar in a bank account.

Circle revealed in July through an auditor’s certification from Grant Thornton that cash makes up just over 60% of reserves. The remaining 40% was backed by various forms of debt securities.

A stablecoin stands out from other cryptocurrencies in how much it is related to an existing currency such as the US dollar or the euro. The goal is to avoid the volatility that is often found in Bitcoin and in other major cryptocurrencies.

Reveal Center, a business consortium founded by Circle And Coinbase, regarding the recent change. He said in a post: Recognizing the feelings of the community, our commitment to trust and transparency and the regulatory landscape in evolution. Circle, backed by Center and Coinbase, announced that it now holds the entire USDC reserve in cash and in the form of short-term US Treasuries.

The Trade Coalition added: These changes are being implemented urgently. It is reflected in the future auditing firm Grant Thornton certifications.

Reserves were in cash until March 2020. When the company added short-term US Treasuries to cope with the currency’s rapid growth. Foreign exchange reserves were transferred to a larger investment portfolio in May 2021.

Additionally, Circle and Coinbase have said that users can exchange one USDC dollar for real dollars which can be deposited into a bank account.

Many cryptocurrency traders use stablecoin as an alternative to buying or selling digital currencies. USDC is the second stablecoin to the world, with 27 billion dollars worth of coins in circulation.

Tether, the largest stablecoin with a circulation of $ 75 billion, it was scrutinized by regulators. This is among fears that it does not have enough resources to support its currency peg to the dollar.

At the beginning of questyear, broadcaster Tether revealed that 2.9% of its reserves were held in cash.

The vast majority of its reserves consisted of corporate bonds, precious metals and commercial paper. It is a form of short-term unsecured debt that is considered riskier than government bonds.

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